Question 1

The price on the sale of goods from one member of a corporate family to another is known as a ________.

Accepted Answer

A)  transfer price 
B)  sale/resale price 
C)  global price 
D)  multidomestic price 
A)  transfer price 
B)  sale/resale price 
C)  global price 
D)  multidomestic price

Question 2

The challenge with setting an optimal transfer price is that there could be conflicting conditions in the local country.

Accepted Answer

A) True 
 B)False

Question 3

Larson Shoes is a British company.Which balance sheet format is most likely used by Larson?

Accepted Answer

A)  assets + liabilities = shareholders' equity 
B)  liabilities + shareholders' equity = assets 
C)  noncurrent assets + current assets - current liabilities - noncurrent liabilities = shareholders' equity 
D)  noncurrent assets - net current assets = liabilities + capital and reserves 
A)  assets + liabilities = shareholders' equity 
B)  liabilities + shareholders' equity = assets 
C)  noncurrent assets + current assets - current liabilities - noncurrent liabilities = shareholders' equity 
D)  noncurrent assets - net current assets = liabilities + capital and reserves

Question 4

U.S.and U.K.companies tend to be more transparent than Japanese companies.

Accepted Answer

A) True 
 B)False

Question 5

The Netherlands is an example of a country that is micro-based from an accounting perspective,as opposed to macro-uniform based.

Accepted Answer

A) True 
 B)False

Question 6

GAAP usage differences increase the problems associated with ________.

Accepted Answer

A)  trading foreign stock 
B)  establishing e-commerce 
C)  identifying emerging markets 
D)  raising capital in different countries 
A)  trading foreign stock 
B)  establishing e-commerce 
C)  identifying emerging markets 
D)  raising capital in different countries

Question 7

Currency is a major issue in financial reporting because companies must decide in which currency to present their financial information to the general public.

Accepted Answer

A) True 
 B)False

Question 8

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

Accepted Answer

A) True 
 B)False

Question 9

The most common approach to translate budgets and compare a budget with actual performance uses the ________.

Accepted Answer

A)  spot rate 
B)  forecast rate 
C)  historical exchange rate 
D)  temporal exchange rate 
A)  spot rate 
B)  forecast rate 
C)  historical exchange rate 
D)  temporal exchange rate

Question 10

Which of the following is conducive to low transfer prices from the parent company to a foreign subsidiary and high transfer prices to the parent company from a foreign subsidiary?

Accepted Answer

A)  political instability 
B)  restrictions on profit or dividend remittances 
C)  restrictions in the subsidiary country on the value of imported products 
D)  desire to mask the profitability of the foreign subsidiary to keep competitors out 
A)  political instability 
B)  restrictions on profit or dividend remittances 
C)  restrictions in the subsidiary country on the value of imported products 
D)  desire to mask the profitability of the foreign subsidiary to keep competitors out

Question 11

The balanced scorecard is an approach to performance measurement that closely links the strategic and financial perspectives of a business.

Accepted Answer

A) True 
 B)False

Question 12

Compare the two major approaches used to translate foreign currency financial statements,and explain how translation gains and losses are reported under these two approaches.

Accepted Answer

Statement No.52 allows companies to use

Question 13

When recording the value of a purchase denominated in a foreign currency,the company is required to use the spot rate when payment is made,as long as it is made 30 days or more in the future.

Accepted Answer

A) True 
 B)False

Question 14

U.S.-based MNEs are not permitted to set budgets and monitor results using the same exchange rate.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true concerning the International Accounting Standards Board?

Accepted Answer

A)  The IASB is an EU institution designed to harmonize accounting standards among EU member countries. 
B)  The EU has voted to not adopt IFRS issued by the IASB so that it will not hurt its own convergence efforts. 
C)  The IASB and the FASB of the United States are working closely to harmonize accounting standards. 
D)  FASB has been ordered by the SEC to not work with the IASB in setting accounting standards. 
A)  The IASB is an EU institution designed to harmonize accounting standards among EU member countries. 
B)  The EU has voted to not adopt IFRS issued by the IASB so that it will not hurt its own convergence efforts. 
C)  The IASB and the FASB of the United States are working closely to harmonize accounting standards. 
D)  FASB has been ordered by the SEC to not work with the IASB in setting accounting standards.

Question 16

The Financial Accounting Standards Board and International Accounting Standards Board allow firms to use the current-rate method or the temporal method to translate foreign currency financial statements into the currency of the parent company.

Accepted Answer

A) True 
 B)False

Question 17

Under the current-rate method of translation,any gain or loss is known as a(n)________.

Accepted Answer

A)  liability 
B)  foreign-exchange 
C)  annual net income 
D)  accumulated translation adjustment 
A)  liability 
B)  foreign-exchange 
C)  annual net income 
D)  accumulated translation adjustment

Question 18

A major reason for the Parmalat accounting scandal is that the firm ________.

Accepted Answer

A)  sold milk in countries without a license 
B)  used U.S. GAAP standards instead of IFRS 
C)  used off-balance-sheet financing to hide debts 
D)  transferred most of its assets to banks in Switzerland 
A)  sold milk in countries without a license 
B)  used U.S. GAAP standards instead of IFRS 
C)  used off-balance-sheet financing to hide debts 
D)  transferred most of its assets to banks in Switzerland

Question 19

In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?

Accepted Answer

Standard-setting in the United States de

Question 20

Consolidation of financial statements is the process of restating foreign subsidiary financial statements into the GAAP of the parent company.

Accepted Answer

A) True 
 B)False

The price on the sale of goods from one member of a corporate family to another is known as a ________.

The challenge with setting an optimal transfer price is that there could be conflicting conditions in the local country.

Larson Shoes is a British company.Which balance sheet format is most likely used by Larson?

U.S.and U.K.companies tend to be more transparent than Japanese companies.

The Netherlands is an example of a country that is micro-based from an accounting perspective,as opposed to macro-uniform based.

GAAP usage differences increase the problems associated with ________.

Currency is a major issue in financial reporting because companies must decide in which currency to present their financial information to the general public.

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

The most common approach to translate budgets and compare a budget with actual performance uses the ________.

Which of the following is conducive to low transfer prices from the parent company to a foreign subsidiary and high transfer prices to the parent company from a foreign subsidiary?

The balanced scorecard is an approach to performance measurement that closely links the strategic and financial perspectives of a business.

Compare the two major approaches used to translate foreign currency financial statements,and explain how translation gains and losses are reported under these two approaches.

When recording the value of a purchase denominated in a foreign currency,the company is required to use the spot rate when payment is made,as long as it is made 30 days or more in the future.

U.S.-based MNEs are not permitted to set budgets and monitor results using the same exchange rate.

Which of the following is true concerning the International Accounting Standards Board?

The Financial Accounting Standards Board and International Accounting Standards Board allow firms to use the current-rate method or the temporal method to translate foreign currency financial statements into the currency of the parent company.

Under the current-rate method of translation,any gain or loss is known as a(n)________.

A major reason for the Parmalat accounting scandal is that the firm ________.

In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?

Consolidation of financial statements is the process of restating foreign subsidiary financial statements into the GAAP of the parent company.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

International Trade and Factor-Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

Global Capital Markets

Globalization and Society

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply-Chain Management

International Human Resource Management

Filters

Exam 19: International Accounting and Finance Issues

The price on the sale of goods from one member of a corporate family to another is known as a ________.

The challenge with setting an optimal transfer price is that there could be conflicting conditions in the local country.

Larson Shoes is a British company.Which balance sheet format is most likely used by Larson?

U.S.and U.K.companies tend to be more transparent than Japanese companies.

The Netherlands is an example of a country that is micro-based from an accounting perspective,as opposed to macro-uniform based.

GAAP usage differences increase the problems associated with ________.

Currency is a major issue in financial reporting because companies must decide in which currency to present their financial information to the general public.

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

The most common approach to translate budgets and compare a budget with actual performance uses the ________.

Which of the following is conducive to low transfer prices from the parent company to a foreign subsidiary and high transfer prices to the parent company from a foreign subsidiary?

The balanced scorecard is an approach to performance measurement that closely links the strategic and financial perspectives of a business.

Compare the two major approaches used to translate foreign currency financial statements,and explain how translation gains and losses are reported under these two approaches.

When recording the value of a purchase denominated in a foreign currency,the company is required to use the spot rate when payment is made,as long as it is made 30 days or more in the future.

U.S.-based MNEs are not permitted to set budgets and monitor results using the same exchange rate.

Which of the following is true concerning the International Accounting Standards Board?

The Financial Accounting Standards Board and International Accounting Standards Board allow firms to use the current-rate method or the temporal method to translate foreign currency financial statements into the currency of the parent company.

Under the current-rate method of translation,any gain or loss is known as a(n)________.

A major reason for the Parmalat accounting scandal is that the firm ________.

In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?

Consolidation of financial statements is the process of restating foreign subsidiary financial statements into the GAAP of the parent company.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

International Trade and Factor-Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

Global Capital Markets

Globalization and Society

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply-Chain Management

International Human Resource Management

Filters